Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
International gold prices rose for a 2nd consecutive week, while silver prices rose for a 5th consecutive week this week.
Domestic gold and silver prices also rose for a 5th consecutive week this week.
The U.S. Dollar was weak this week as sentiment in wider financial markets remained weak as economic growth in China slowed, while a relentless surge in oil prices fuelled worries over rising inflation and supply chain issues boosted the safe-haven appeal.
However, a rise in U.S. Treasury yields as market participants are increasingly expecting the Fed to start tapering its asset purchases soon kept upside capped.
Further keeping prices upside limited were expectations for solid quarterly earnings, which provided a boost to U.S. equities this week.
Meanwhile, two Fed members said that if inflation keeps rising at its current pace in the next few months, policymakers may need to begin dialling down its bond-buying program and adopt a more aggressive policy response next year.
Better than expected data also capped upside in bullion.
Jobless claims totalled 290,000 for the week ended Oct. 16. That was down 6,000 from the previous week. Continuing claims also dropped to a new pandemic low, falling to 2.48 million.
Meanwhile, some gains were capped after Federal Reserve Chairman Jerome Powell said the U.S. central bank should begin reducing its asset purchases soon but should not yet raise interest rates.
Powell said employment is still too low and high inflation will likely abate next year as pressures from the COVID-19 pandemic fade, even as many market participants are concerned that rising price pressures will last longer than policymakers believe.
Gold and silver prices could remain range bound in the coming week as investors continue to anticipate the Fed's tapering next month.
Rising U.S. bond yields and rebounding U.S. Dollar offset support from concerns over rising inflation and China's troubled property sector.
Markets could continue to consolidate ahead of the Fed meeting the first week of November.
Ahead of the Fed meeting, the ECB is also expected to meet next week.
Investors expect the Fed and European Central Bank will keep rates low for too long.
On the macro economic front, U.S. GDP, jobless claims, durable goods orders and the Fed favoured PCE Price index will be the driving factors for prices.
Across the Atlantic, GDP data from Germany will also move the markets.
Technically, if LBMA spot gold trades above $1790, it could continue its Bullish momentum up to $1815-$1835 levels. A trade below would pull prices to the support zones at $1780-$1760 levels.
Technically, if MCX Gold December trades above 47700, it could see a Bullish momentum up to 48100-48500 levels. A trade below would pull prices to the support zones at 47400-47150 levels.
On the silver side of things, if LBMA Silver trades above $24.00 level, it could see sideways to marginal upside momentum up to $24.98-$26.30 levels. A trade below would pull prices to the support zones at $23.40-$22.70 levels.
Domestically, if MCX Silver December trades above 65200 level, it could see a Bullish momentum up to 66700-67600 levels. A trade below would pull prices to the support zones at 64700-63000 levels.
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